AusSuper spoils Brookfield, EIG’s $18.7b Origin hopes
Origin Energy’s largest investor, AustralianSuper, says the company’s share price is “substantially below” its long-term value estimate, suggesting that Brookfield and EIG will need to increase their $18.7 billion takeover offer to secure the energy giant.
AustralianSuper raised its interest in Origin to 13.68 per cent, an increase of 1.02 percentage points.
It follows fund manager Perpetual’s declaration this month that Origin’s value was “materially higher” than it was 12 months ago, and warranted a higher bid price.
Brookfield has pledged to invest between $20 billion and $30 billion to add 14 gigawatts of clean energy assets in Origin’s name over the next 10 years, which it argues will accelerate the economy’s path to the 2030 emissions reduction target. That compares with Origin’s existing plan for a 4 GW expansion by 2030 without the benefit of Brookfield’s capital.
Smaller investor Kingfisher Capital Partners agreed the offer is looking out of date, while Macquarie Equities speculated the price needed to be closer to $10 a share or higher.
“The Origin board’s unanimous recommendation to shareholders has been overtaken by Origin’s restoration of earnings power and overall outlook,” said Kingfisher’s Ross Illingworth, who suggested a price north of $11 a share, more than 20 per cent higher than the value of the binding agreement between the parties in March.
Shares in Origin rose 0.4 per cent to $8.70. The share price has remained capped by the offer price from Canada’s Brookfield and EIG Partners of the United States, despite several profit upgrades by Origin over the past few months and a turnaround in profits at its partly owned UK-based affiliate Octopus Energy.
The offer price of about $8.91 a share at the time
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